The Reserve Bank of Australia’s (RBA) decision on a potential interest rate cut in November hinges on the upcoming September quarter inflation data, according to Michael Knox, chief economist at Morgans. Knox suggests that if core inflation slows to 2.5 per cent annually, the RBA is likely to lower the cash rate to 3.35 per cent. Should the September figure remain at 2.7 per cent or climb higher, Knox anticipates that the Reserve Bank will hold off on further rate cuts.
The quarterly inflation report, a key indicator for the central bank, is scheduled for release on October 29. This date is just days before the RBA’s next policy meeting on November 4, providing policymakers with crucial information before making their decision. The report will be closely scrutinised by economists and financial analysts for insights into the current state of the Australian economy.
Bond markets are currently pricing in a significant probability of further monetary easing. According to market indicators, there is a two-in-three chance that the central bank will deliver a fourth interest rate cut this year at its November meeting. Such a move would be aimed at stimulating economic growth amid concerns about slowing global and domestic activity.
The Reserve Bank of Australia is the nation’s central bank, responsible for maintaining price stability and full employment. It implements monetary policy decisions to influence interest rates and credit conditions in the economy.
